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Utilising Help to Buy Scheme vs Going It Alone Help Required

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Good afternoon everyone,

Having used to forum previously I thought I would pick your brains with a reasonably complex query I'm struggling to find much information about elsewhere.

My long term girlfriend and I are looking to purchase our first house in Bristol - Budget wise we are looking in the region of £200k with a combined annual income of around £50k; additionally we have around a £30K / 15% deposit. In theory I could potentially raise this deposit to around 25% with the help of some very generous family members.

I want to buy something that needs some work with the plan to add value and progress up the ladder. I've been trying to establish if it's beneficial to take up the help to buy scheme alternatively if I can utilise the HTB to facilitate more efficient borrowing or funding of any works. I guess I could use the HTB scheme whilst retaining cash to fund the project but is this beneficial in the grand scheme of things; alternatively should I just put as much into the mortgage as possible.

Your help and advice on the matter would be most appreciated,

Kind regards,

Richard
:beer:

Comments

  • ACG
    ACG Posts: 24,555 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    How much do you anticipate the work costing and how long do you think it will take?

    I did something similar to you, at the time there was no HTB or any 95% mortgages, i threw as much at my deposit i could to keep my payments as low as i could knowing the work would take a good year to complete (it ended up taking about 18 months), so i worked and as and when i saved up some more i got something else done. I could probably have done the work in around 9 months had i had all the cash sitting there waiting.

    However because i did it the way i did, my mortgage was around £70 than if i had gone for a 90% mortgage. So i am £1500-1700 better off which if we are looking at it has paid for my boiler and radiators.

    Each to their own though, if i would have had kids for instance i would have borrowed as much as possible and got the work done asap.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    If you wish to build equity then budget on repaying the debt off quicker. As over time the saving in compound interest will mount.

    Lower LTV will also mean a lower rate of interest.

    Don't budget on exceptional returns from refurbishment. Your taste may not be the same as your buyers.
  • kingstreet
    kingstreet Posts: 39,256 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Richard01 wrote: »
    I want to buy something that needs some work with the plan to add value and progress up the ladder. I've been trying to establish if it's beneficial to take up the help to buy scheme alternatively if I can utilise the HTB to facilitate more efficient borrowing or funding of any works. I guess I could use the HTB scheme whilst retaining cash to fund the project but is this beneficial in the grand scheme of things; alternatively should I just put as much into the mortgage as possible
    The HTB - Equity Loan scheme is newbuild only.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • I thought that the HTB scheme had been extended to the purchase of older properties and not just new build properties - have I miss understood this? I have to say the information available is incredibly unclear with regards to the true costs of using such a scheme.

    My original thinking was that potentially the HTB scheme could help me borrow more whilst leaving enough to cover renovations. I do anticipate on living there and updating as I go however to have the cash in the bank would make it much easier.

    Thanks for your help and advice,

    Richard
  • kingstreet
    kingstreet Posts: 39,256 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Yes, you've misunderstood.

    The HTB - Equity Loan scheme applies only to newbuilds.

    The HTB - Mortgage Guarantee scheme applies to send-hand homes, but works to increase the supply of 95% mortgages, not provide equity loans.

    http://www.helptobuy.org.uk/
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • amnblog
    amnblog Posts: 12,728 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    In short the HTB scheme (equity scheme or mortgage guarantee scheme) is of no use to you in terms of what you propose to do.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
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